Self Employed Income Calculator
Reconcile business profit and selected adjustments across financial periods to estimate annual self-employed income.
Ownership
The applicant's share of the business profit. For joint applicants who own the business together, enter their combined share.
Financial periods
Enter the oldest period first. Use 0 for adjustments that do not apply.
Adjustments to include
Non-cash expenses already deducted in the profit.
Add back interest only on business debt this loan repays.
Costs that will not recur, such as a one-off write-off.
Any other expense you can show will not continue.
Income that will not recur, such as an asset sale or insurance payout.
Exclude it when the application already counts it as employment income.
Extra contributions the business made for the applicant.
Income rule
The most recent period is limited to this percentage of the period before it.
Scaling assumes the business earns at the same rate for the rest of the year.
Results
Selected annual income
$119,375
Under the income rule you choseAverage annual income
$119,375
Across the periods usedLowest period
$111,500
Lowest annual income usedAverage of 2 periods used. 2 of 2 periods used at 50% ownership. Included addbacks total $27,500 and excluded entries total $0.
Income by period
From the stated profit to annual income, one column per period.
| Item | Previous year | Latest year |
|---|---|---|
| Months covered | 12 | 12 |
| Net profit before tax | $92,000 | $104,000 |
| Depreciation added back | $8,000 | $10,000 |
| Interest added back | $3,000 | $2,500 |
| Non-recurring expenses added back | $0 | $4,000 |
| Other addbacks | $0 | $0 |
| One-off income removed | $0 | -$6,000 |
| Adjusted business profit | $103,000 | $114,500 |
| Ownership share at 50% | $51,500 | $57,250 |
| Salary paid to the applicant | $60,000 | $65,000 |
| Super above the compulsory rate | $0 | $5,000 |
| Income for the period | $111,500 | $127,250 |
| Annual income | $111,500 | $127,250 |
Excluded entries
Amounts you entered that are not in the income, and one-off income left in the profit.
| Item | Previous year | Latest year |
|---|---|---|
| Distributions, not added | $0 | $0 |
Warnings
No warnings for these entries.
The calculator adds and removes only the adjustments you select. A lender decides which addbacks it accepts, how many periods it needs and which income rule it applies.
Ownership applies once, to the adjusted business profit. Salary and super paid to the applicant are added at their full amount. Distributions and dividends are never added, because they come out of the same profit.
Amounts are rounded to cents at each step. Your entries stay in this browser. CSV includes every period and adjustment. It also lists the warnings. PDF uses your browser's print dialog.
From Profit to Assessable Income
Assessable income for a self-employed applicant starts with the net profit before tax in the business's financial statements. That profit is after every expense the business claimed, including any salary it paid the applicant, depreciation and interest.
Before adding anything, work out what the profit already contains. Salary paid to the applicant was deducted as an expense, so it comes back at its full amount. Distributions and dividends are paid out of the profit after it is worked out, so adding them counts the same money twice. Depreciation spreads the cost of an asset bought earlier, so no cash left the business for it that year.
Take a hypothetical business with a $100,000 profit after paying the applicant a $60,000 salary. The applicant owns 50%, and depreciation is $10,000. This calculator applies 50% to the $110,000 adjusted profit, giving $55,000, then adds the salary at its full amount for $115,000.
Adding the salary to the profit before applying 50% gives $85,000 instead, which halves a salary the applicant received in full. Some lender worksheets apportion all addbacks by ownership. To model that calculation, enter the salary under Other addbacks and leave Salary paid to the applicant at 0.
The income table keeps each adjustment on its own row, from net profit before tax to annual income, so you can tick each line off against the profit and loss statement. In the starting example, the latest year's $104,000 profit becomes $114,500 of adjusted business profit. The 50% ownership share is $57,250, and the $65,000 salary and $5,000 of extra super bring it to $127,250.
Comparing Financial Periods
The calculator converts each period to an annual figure, then shows the average, the lowest period and the result under the income rule you choose. A 12-month period is used as entered. A shorter or longer period is left out unless you choose to scale it to 12 months at the same pace.
Scaled at the same pace, a six-month period with $45,000 of income becomes $90,000 for the year. That assumes the remaining months earn at the same rate, which overstates income when the busy season fell in the months entered. An 18-month first year scales the other way, so $90,000 becomes $60,000.
In the starting example, the previous year's $111,500 and the latest year's $127,250 average $119,375. The lowest period is $111,500.
Losses stay negative. Annual income of $80,000 followed by a $20,000 loss averages $30,000, and the lowest period is the loss itself. The warnings list each loss and any fall in the most recent period.
The growth cap uses the most recent period, limited to a percentage of the period before it. With a 120% cap, income that rose from $80,000 to $120,000 counts as $96,000. Macquarie's guidelines for self-employed applications use a 120% limit when income rises and the most recent year alone when it falls.
Addbacks and Lender Acceptance
An addback in this calculator is arithmetic: it reverses an expense in the profit. Whether a lender accepts that addback is a separate policy decision, and lenders set different limits on the same item.
Macquarie's guidelines, for example, limit depreciation to 20% of business net profit. They restrict interest addbacks to business loans being refinanced. These limits are not applied automatically here.
Set each adjustment to match the lender's policy before you rely on the result. An excluded adjustment moves to the excluded entries table, and distributions always appear there. The worksheet then shows everything the statements contain beside what the income uses.
Ownership follows lender policy too. Macquarie applies the ownership percentage to net profit for applicants who own 50% or more. For a minority owner, it uses the dividends and franking credits actually received, up to that share of net profit. This calculator always applies the ownership share. When the applicant is a minority owner, compare that share with the distributions in the excluded entries table.
The result is income before tax. To estimate the tax on it, use the income tax calculator.